See Frequently Asked Question
What is Life Insurance and when is the right time to get Life Insurance?
Life insurance provides financial support to your family or dependents when you're no longer able to. You choose the coverage amount, and the ideal time to get insured depends on your circumstances, especially if others rely on you financially.
How does Life Insurance work?
Life insurance is a plan where you pay regular premiums, and the insurance company gives money to your family or beneficiaries when you pass away. It helps cover expenses like debts, funeral costs, or living expenses for your loved ones.
What is underwriting?
Underwriting in life insurance is the process insurers use to assess the risk of insuring an individual. Factors like age, sex, health, lifestyle, coverage amount, and medical history are evaluated.
Do I need a medical exam for Term Life Insurance?
Your sex, age, the amount of coverage you’re applying for, your health status and medical history will all determine whether or not a medical exam is required.
Is life insurance taxable in Canada?
No, the death benefit from a life insurance policy is generally tax-free in Canada. However, any investment growth within a policy (like in universal life insurance) may be taxed if withdrawn before death.
Can the beneficiary of an RESP be changed or replaced?
Yes, as long as the terms of the plan allow it. This applies to both family plans and non-family plans.
When should you use spousal RRSPs?
Spousal RRSPs are a specialized type of RRSP designed for couples where one spouse earns significantly more than the other. In a graduated tax system, it’s more tax-efficient for both individuals to have similar incomes (e.g., $25,000 each) rather than one earning $40,000 and the other $10,000.
I’m new to Canada and haven’t filed taxes yet, can I start an RRSP. What’s the best way to reduce my taxable income?
While it won’t reduce your taxable income immediately, you can open a TFSA to start growing your investments tax-free.
When withdrawing from an RRSP before maturity, is income tax calculated on the full withdrawal amount or the amount left after withholding tax is deducted?
The withholding tax is applied upfront and counts toward your total taxes owed on the withdrawal. At tax time, it will be deducted from the total amount you owe.
How often can I withdraw from and contribute to my TFSA?
You can withdraw and contribute as many times as you want, as long as you stay within your contribution limit.
How much of an income difference is needed for a spousal RRSP to be beneficial?
There isn’t a fixed threshold, but a spousal RRSP is generally beneficial if you and your spouse are in different tax brackets.
Is a RESP tax-deductible?
No, RESP contributions are not tax-deductible like RRSP contributions.
Can a child be a beneficiary in multiple RESPs?
Yes, a child can be the beneficiary of more than one RESP. However, there is a lifetime contribution limit of $50,000 per child.